A genetic approach has been developed to study transcription by RNA polymerase III. A pair of Schizosaccharomyces pombe nonsense suppressor tRNA genes were arranged in tandem such that expression of the downstream (supS1) tRNA suppressor was dependent upon transcription initiated by the internal promoter of the upstream (sup9-e) gene. Dominant mutant strains of Saccharomyces cerevisiae were isolated that suppress in trans the effect of an A block promoter mutation (A19) in the sup9-e gene and restore supS1 suppressor activity. Fifteen mutant strains, eight of which were independently isolated, all have elevated steady-state levels of sup9-e A19 RNA consistent with an increase in gene transcription. Extracts of a strain carrying the dominant mutant gene, PCF1, show a general 6-fold stimulation in transcription of mutant (A19) and wild-type tRNA genes and increase 5S gene transcription 4-fold compared with extracts from a wild-type strain. A transcription factor exclusion assay was used to show that the PCF1 mutation affects two distinct stages in transcription: one prior to and one after stable complex formation; and that these effects are mediated by a component of the stable complex. Further evidence of an effect during complex assembly was obtained in a time-course experiment that showed a shortened lag phase in the PCF1 extract. The results indicate that PCF1 is either a component of the stable complex or a positive regulator of its activity.